The US dollar, which turned 150 this week, is finally starting to act its age.
In 1861, people getting paid in the untried new paper currency initially were wary, sending its value sharply lower versus specie. The phrase “not worth a Continental” – a reference to paper dollars issued to finance the Revolutionary War eight decades earlier – showed their scepticism about fiat currency. They feared the dollar, created to finance the Union’s war against 11 rebel states who had issued their own dollar three months earlier, would suffer the same fate.
Well, the Confederacy didn't last. Paper currencies don't last either, so I have heard. It has been a gradual process, but it is also showing a trend towards the same instability as all fiat currencies in history. Our current debt crisis is testimony to that.
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